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Read on to see an article posted on the OMG blog on 2 August 2016:

Follow the Fundamental Momentum

What’s caused the COO to be recently granted options exercisable at from 12.5p to 30p and the CEO to buy shares at up to 16.5p?

The statement on the 15th of July may have caused this sequence of events or is it the anticipation of  likely improvement of the  Interims which are due to late September?  The statement included a reminder that £1.8m of annualized cost reductions have been created by the restructuring.  The pipeline of opportunities in the technology business was reported to be growing strongly as the capabilities of the Group’s integrated proprietary applications gain wider understanding and traction, particularly in the US.  The partnership with Aprinta in the US, announced on 14 June 2016, is on plan for launch by the final quarter of this year. This is a five-year revenue share which will integrate the solution into an SME online marketing platform as provide the basic artworks functionality to a 650,000 SME user base allowing the design of graphics for email campaigns and the USA market is estimated at $22bn.

The growth strategy remains to focus on high margin SaaS artwork and pre-production services  to SME’s under the Customer Focus  brand, both within the UK and increasingly within North America.A recently launched product called artworktool enables users to easily create and share graphics and print-ready artwork using any device. Other JV opportunities remain a target. The UK revenue is largely generated from the Trade Only National Show in January, with bookings in-line with expectations. Discussion of its potential sale have ended.  There are over 4,000 delegates that attend the event involved in the print, promotional and personalized gift sector and is a show case to drive sales to the SaaS service.  It not hard to guess that the interim’s will show an  improvement.

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Financials

The finals to December showed a 2.1% increase in revenue to £4.4m with gross margins of 78%. The operating cash flow increased to £0.52m. There is no bank borrowings and net cash was £0.37m which should be sufficient.

Trading Strategy

Trading momentum is building in this tightly held share. We are in……

Altitude (LSE: ALT)

17.5p (16p- 17.5p)

Mkt Cap £7.4m

Next Results: Interims September

Last OMG! Price 12.5p

Buy Now - £54/year

Read more sample articles:

15 Sep – COG Could go Mad

15 Aug – Sunny side down

1 Aug - Follow the Fundamental Momentum

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